Don't Ask, Don't Tell for Obamacare?

[dixonge]

So evidently the IRS has been processing so-called 'silent returns' without rejection or withholding money from refunds if you didn't indicate whether or not you had insurance coverage, or whether or not you were exempt. That was all scheduled to stop for the 2016 tax year, but after one of Trump's Executive Orders the IRS interpreted this to mean they should alter their plans and once again process all silent returns. They have communicated this to tax professionals and software preparation companies, not all of which are changing their software to allow for this. Technically the penalty is still in place, but with practically no way to enforce it.

IRS won't reject returns or withhold refunds over Line 61 silence

 

[Big_Hitter]

what happens if you get audited?

 

[txtig]

I just read about this this morning. I'm in the process of helping my son with his tax return. He is self employed and did not have any health insurance during 2016. We are assuming he would be subject to the penalty. Now, we're wondering if he should go silent on this issue? Not very much income, so probably low risk of audit? I've always tried to encourage him to follow the rules and not "cheat," but of the government is now saying it's not going to ask, should he report it anyway? The amount of the penalty is a pretty bog deal to him.

 

[Texas Proud]

This is from memory so it might be wrong...

But, I thought that when it was rolled out that the IRS would not do anything to try and collect... IOW, it was not a 'tax' issue.... so even if you were supposed to pay and did not, that was the end of it.... at least for the IRS...

 

[dixonge]

what happens if you get audited?

oops! However did I miss that line! Silly me...

*shrug*

 

[GalaxyBoy]

This is from memory so it might be wrong...

But, I thought that when it was rolled out that the IRS would not do anything to try and collect... IOW, it was not a 'tax' issue.... so even if you were supposed to pay and did not, that was the end of it.... at least for the IRS...

I thought the Supreme Court ruled that it was a tax and therefore constitutional?

In any case (and staying non-partisan), I see the potential for changes that are quite unpredictable, making the audit question impossible to answer.

 

[Just_Steve]

You roll your dice and take your chances.

 

[samclem]

Now, we're wondering if he should go silent on this issue? Not very much income, so probably low risk of audit? I've always tried to encourage him to follow the rules and not "cheat," but of the government is now saying it's not going to ask, should he report it anyway? The amount of the penalty is a pretty bog deal to him.

If the IRS (the government) is now saying that it is no longer enforcing a particular rule, then it would (IMO) be foolish to comply with that rule. The previous rule (which is no longer being enforced), effectively becomes a tax on people who believe in following the letter of the law or people who aren't in the know about the change. By not checking the box, your son is not only saving money, but encouraging the government to enforce the rules it makes--a win-win. It sounds like things could change fast, so get that tax return filed quickly.

 

[Souschef]

You roll your dice and take your chances.

Sometimes that is not possible. I do taxes through the AARP program. They are using Taxslayer this year, and there is a section that asks about your health coverage.
I do my own taxes with Turbotax and that program also asks if you have coverage

 

[samclem]

I do my own taxes with Turbotax and that program also asks if you have coverage

About midway down the article linked from the OP:

In an email, Intuit spokeswoman Julie Miller said that starting March 2, “TurboTax customers can e-file their return without indicating if they had health care coverage last year.”

Maybe try "go to form" and erase the "X" on line 61 rather than do the interview?

 

[Texas Proud]

I thought the Supreme Court ruled that it was a tax and therefore constitutional?

In any case (and staying non-partisan), I see the potential for changes that are quite unpredictable, making the audit question impossible to answer.

It is a tax, but the IRS was not tasked to enforce the tax.... so, they collect it or withhold it from a refund, but that is about it... here is an article talking about it...

From the article...

But the text of the ACA is very clear in stating that taxpayers who don’t pay their ACA penalty are not subject to levies, liens, or criminal prosecution.
The only way that the IRS can collect the ACA penalty is if you pay it voluntarily, or if you’re owed a refund.

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https://www.healthinsurance.org/faq...for-not-having-health-insurance-is-this-true/